Yes, there are signs of bubbles in farm land (in Canada as well as the US), in commercial real estate and in the equity markets. At least as disturbing, there are signs of housing bubbles growing in some of the same economies that suffered from them in the last financial crisis: the US, the UK, Ireland, Estonia and Latvia. As Shaun Richards noted in his blog yesterday (The economy of Ireland is simultaneously hopeful and worrying): it is hard not to wonder about this from the Central Statistics Office: In Dublin residential property prices grew by 4.2% in May and were 22.0% higher than a year ago. Part of the blame must be assigned to their central banks. Neither the US Fed, the Bank of England nor the European Central Bank includes house prices in their target inflation indicator, and only the ECB has declared its intention to move to an inflation measure that includes house prices in the future. Eurostat will start publishing quarterly owner-occupied housing price indexes in September, but these probably wont be incorporated in the ECBs Monetary Union Index of Consumer Prices until the end of the decade, possibly later.
Posted on: Tue, 08 Jul 2014 20:12:43 +0000
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